United Plans to Furlough 16,000 Employees in October
As the effects of COVID-19 continue to ravage the world and airline industry, United has announced that it plans to furlough another 16,370 employees come October. With assistance of the CARES Act running out and a continuous lackluster demand for air travel, United said they could not continue operating with their current staffing levels.
What is the CARES Act, and What Did It Do for Airlines?
- What is the CARES Act? The CARES Act is the Coronavirus Aid, Relief, and Economic Security Act. It was passed in March, and airlines were given $25 billion in payroll support. However, airlines had to agree to not furlough employees until the assistance ran out on September 30th.
- How much money did United receive? United received roughly $5 billion dollars in payroll support through this act.
Who Will Primarily be Affected at United?
- United plans to reduce staffing in all departments. However, pilots and flight attendants will be most affected.
- Executives at United say they will furlough 2,850 pilots and 6,920 flight attendants.
- 4,270 airport maintenance and operations staff will be furloughed, along with 1,400 management and administration staff.
- Network operations, call center, and catering will only see 930 employees furloughed.
Are There Alternatives?
- There are alternatives to the furloughing, but it all has to do with staffing cuts done through voluntary action. Such alternatives include voluntary separation, early retirement, and paid/unpaid leave of absence programs.
- Another hope is to have a CARES Act 2.0 that extends the payroll support for airlines. From SimpleFlying: “The Association for Flight Attendants is calling for an extension of support through March 31st, citing the downturn in domestic air travel. The Air Line Pilots Association is calling for an extension through March 21st. Either way, it would be about a six-month extension of the current payroll support.”
- Voluntary leave programs at United are currently only limited to pilots, but the company has said they are willing to open things up for other departments as well.
What’s the Future Look Like?
- The US Government has not commented about a potential extension of the CARES Act Payroll Support. The President, however, voiced his support for airlines before his departure to Kenosha: “We’ll be helping the airlines, you have to help the airlines, it’s a tough business always is. Airlines are a tough business in good times and we are about ready to get back to good times.”
- Despite presidential support, airlines are not too optimistic about the future. United sent WARN notices to 36,000 employees earlier this summer, and following the furloughs, the airline’s 95,000 workforce will be cut by that 1/3rd.
- Other airlines have also said they will be furloughing staff. American Airlines has plans to furlough 19,000 employees while Delta plans to furlough 9,000 employees. Southwest, Spirit, and JetBlue have said they will not furlough any employees this year.
As things stand, unless airlines get an extension of the payroll support or see a substantial increase in travel demand, furloughs will happen. It is tragic to see such events happen, but as the situation in these times remains dire, it’s a fight for survival for everyone.